Education fund outlook: districts report modest budget increases; governor’s $77.2M buy-down would cut average property bill change to 1.1%

During a joint hearing of the Senate Finance Committee and the House Ways and Means Committee, state education and fiscal officials gave lawmakers an updated outlook on school budgets for the next fiscal year and modeled the effect of proposed state funding that would reduce property tax increases.

"I'm Sean Cousin, the interim CFO at the Agency of Education," said Sean Cousin, reporting on preliminary budget collections from districts and the department's early estimates. Cousin told committees that 105 school districts had submitted preliminary budget figures in the December and January collections and that those submissions accounted for most of the state’s long-term weighted average daily membership (ADM). For the remaining districts that had not submitted budgets, the Agency imputed a 6.41% increase and included a 1% cushion in that estimate.

Julia Richter of the Joint Fiscal Office, presenting an updated Education Fund Outlook, said the JFO had incorporated those local budget data and other recent changes into its yield modeling. "Column D and E then reflect one policy change or policy consideration in the modeling," Richter said, explaining that the outlook shows an average uniform bill change of about 5.8% using current data and policy assumptions but that the governor's recommended one‑time $77.2 million general-fund transfer to buy down property tax rates would reduce the modeled uniform average bill change to about 1.1%.

Why it matters: the committees are weighing how state revenues, local school budgets and one-time general-fund transfers interact to affect property tax bills paid by homeowners and businesses. Richter warned that the uniform average is a single way to present results but that actual bill changes will vary widely across towns and school districts.

Key figures and modeling details described at the hearing: - Agency of Education: 105 districts reported preliminary budgets (about 92% reporting by weighted ADM); 17 districts had not submitted and were imputed at a 6.41% increase (Sean Cousin). Cousin summarized the preliminary effect as an overall increase of roughly 5.9% in education spending from FY25 to FY26 (figure cited by presenter; districts’ submissions and the imputed amount together produce that estimate). - Joint Fiscal Office: the December 1 outlook has been updated with the House-passed budget adjustments and the recent data collection. With only data updates, the modeled uniform average bill change is about 5.8%; including the governor's recommended $77.2 million transfer to buy down property tax rates produces a modeled uniform average bill change of about 1.1% (Julia Richter). - Excess spending threshold: the JFO reported 11 school districts in the current data update are at or above the excess spending threshold; when a district exceeds that threshold, the amount above it is effectively double‑taxed and is included in the bill-change calculation (Julia Richter). - Education Fund reserves and surplus: Richter said the outlook shows a prior-year unreserved, unallocated surplus of roughly $41 million and a stabilization reserve that the office treats as fully funded (the presentation referenced a stabilization reserve target around $52.1 million and discussed statutory targets described in committee testimony; the exact statutory citation was not given at the hearing).

Committee members pressed for more granularity. Representative Kimball asked whether the committees would be able to see personnel versus nonpersonnel spending, saying some districts report cutting staff while other expenses rise. Richter said a more detailed preliminary budget collection was due Feb. 15 and that the JFO would be able to break out salary and benefits within the general fund or education fund after that submission.

Members also asked about federal funding risks. The committees discussed Universal School Meals and federal reimbursement rates; Richter and Cousin said they were not prepared to forecast federal policy changes but noted that federal reimbursements for free and reduced-price meals affect local budgets and the state’s fiscal needs if those federal amounts change.

Next steps and follow-up: Agency of Education staff will continue collecting the Feb. 15 preliminary budget submissions; Cousin said he expects to return to the committees with updated numbers in the coming weeks. The JFO will continue to refine yield modeling as data and policy decisions evolve. There were no formal committee votes at the hearing.

The hearing transcript and the JFO's annotated Education Fund Outlook were posted to the committee webpage and will inform the next set of updates lawmakers review.